Dr. Jed

[jedgraham]

Hi I am a 54 year old physican looking to retire soon do to changes in America. I have been doing well with selling options, and I would like to discuss this stategy.

 

[brewer12345]

Hi, Jed. Perhaps you can elaborate on the option-selling you have been doing. I think you will find that most posters take a dim view of that sort of thing, but there are a few of us who will dabble in something other than mutual funds from time to time.

 

[jedgraham]

It involves credit spreads, but if you do not know what that is then you are going to take a dim view. Life has risks, investements have risks, up side and down side. Knowledge and skill is an asset that can greatly alter the risk.

 

[calmloki]

Let me just pull up a chair to the cracker barrel here and listen in.

 

[Aiming_4_55]

Let me just pull up a chair to the cracker barrel here and listen in.

... let's get the popcorn going too.

Welcome to the forum.

 

[73ss454]

It should be interesting to watch Dr. Jed explain his investing techniques to Brewer. (heh)

 

[ERD50]

It involves credit spreads, but if you do not know what that is then you are going to take a dim view. ...

Rather than assume what anyone knows or does not know, or whether that person would take a dim view or not, why not just tell us how you are using credit spreads.

I am interested. And BTW, I know what they are, and I see them as a tool - not something to be viewed dimly or brightly, but viewed for what they are, no more, no less.

-ERD50

 

[brewer12345]

It involves credit spreads, but if you do not know what that is then you are going to take a dim view. Life has risks, investements have risks, up side and down side. Knowledge and skill is an asset that can greatly alter the risk.

Is that a chip on your shoulder or are you just happy to see me?

As it happens I know what credit spreads are, although I am more of a fundamentalist and this sort of higfhly technical trading generally does not appeal to me. But I would be interested in hearing how you usually execute this strategy.

For the record, I usually trade options in one of three ways. First, I will sell short dated (within 3 months) covered calls on something I own which is nearing my price target as a way to exit with a little vig. Second, I sometimes flat out buy longer dated calls on individual names which I want to increase my exposure to. Third, I occasionally put on a "synthetic long" position on an equity. Most recently, I did this with AXL when it was in the mid-11s by selling the '13 puts struck at $10 asnd buying the '13 calls struck at $12.50. It is a way to increase exposure with little or no immediate outlay of cash, although I usually will only do this in small size.

As the VIX grinds lower, I am increasingly tempted to buy some long-dated VIX calls modestly out the money as portfolio insurance. Have to get out my pencil and decide what I think that might be worth vs. the premiums.

 

[obgyn65]

Welcome to the forum, Jedgraham.

 

[Nords]

Hi I am a 54 year old physican looking to retire soon do to changes in America. I have been doing well with selling options, and I would like to discuss this stategy.

It involves credit spreads, but if you do not know what that is then you are going to take a dim view. Life has risks, investements have risks, up side and down side. Knowledge and skill is an asset that can greatly alter the risk.

Welcome to the board, Jed. I think.

Gosh, it's great to be given credit for all the hard work we've put into improving our financial knowledge. Lemme get this straight-- I'm ER'd and you're working, yet you're already assessing our level of knowledge against our judgment? Can we get any validation credit for this pop quiz?

We get a few posters here every year with investment strategies that may be judged by most to be out on the edges of the bell curve. I'm trying to recall just one of them who's still actively posting here, but maybe one of the other (mainstream) members can help me. Perhaps they stopped posting here because their strategies succeeded beyond their wildest dreams and they found other things to do all day with their new ER.

I hope you're being adequately compensated on the upside for the risks you're taking. Hopefully some of your knowledge & skill is going into planning for hedging the unexpected.

If you haven't already read it then you may want to peruse the "Insane ER strategy" thread, and let us know how you plan to avoid those types of six-sigma events that creep up on even the best of our investment strategies. It's a great example of what happens when you play great offense without keeping a defense on the bench. I'm not suggesting that you're going to end up that way-- I'm just interested in hearing how you hedge the downside risk.

http://www.early-retirement.org/forums/f30/insane-emergency-re-strategy-40682.html